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List of Leading Asset Reconstruction Companies in India

Asset Reconstruction Companies were established to establish a process for retrieving Non-Performing Assets from secured lenders’ records and realizing the value of NPAs. The Reserve Bank of India grants licenses to ARCs, which are given authority by the SARFAESI Act. The list provided includes asset reconstruction companies in India that have been licensed by the RBI.  

The amount they charge in interest or fees can differ greatly due to various factors, such as the type of asset, the acquisition terms, and the strategy for recovery.

Below is a broad summary of the financial components associated with the services offered by leading ARCs in India:

ARCIL (Asset Reconstruction Company India Limited)

ARCIL can be considered the leading ARC in India and is the most ancient and one of the biggest ARCs in India. The main goal is to obtain and manage troubled assets.

Establishment Date

ARCIL was established in the year 2002 and headquartered in Mumbai.

Interest/Fees

Normally, ARCIL applies interest rates according to the conditions of the renegotiated agreement. The usual annual interest rates vary from 12% to 18% based on the asset’s risk profile and recovery potential. A management fee and success fee are also imposed, ranging from 2% to 5% of the amount recovered.

Edelweiss Asset Reconstruction Company Limited

A division of the Edelweiss Group can be considered one of the leading ARCs in India, it focuses on addressing NPAs with creative and thorough strategies.

Establishment Date

Edelweiss Asset Reconstruction Company Limited was established in the year 2008 and headquartered in Mumbai

Interest/Fees

Edelweiss ARC frequently arranges transactions with interest rates varying from 10% to 18% annually. Additionally, they charge a restructuring fee and may receive a portion of the recovered funds, which depends on the type of asset and the terms of recovery.

Phoenix ARC Private Limited

Phoenix ARC, a branch of Kotak Mahindra Bank, specializes in obtaining and resolving distressed assets.

Establishment Date

Phoenix ARC Private Limited was established in the year 2007 and headquartered in Mumbai.

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Interest/Fees

Usually applies annual interest rates of 12% to 20% on reorganized debt. Moreover, Phoenix ARC might have a fee arrangement that involves initial charges and performance-based fees, typically ranging from 3% to 6% of the overall amount recovered.

JM Financial Asset Reconstruction Company Limited

Belonging to JM Financial Group, this ARC is recognized for its significant presence in the distressed asset sector and successful recovery tactics.

Establishment Date

JM Financial Asset Reconstruction Company Limited was established in the year 2008 and headquartered in Mumbai.

Interest/Fees

Typically, the annual interest rates vary between 11% and 19%. JM Financial ARC also levies management fees and performance-based fees, which can vary from 2% to 5% of the asset’s recovery value.

Prudential ARC Limited

Renowned for its emphasis on acquiring distressed assets and resolving them with efficient management and recovery procedures.

Establishment Date

Prudential ARC was established in the year 2006 and headquartered in Mumbai.

Interest/Fees

The average annual interest rates usually range from 12% to 16%. Prudential ARC may also charge a mix of initial fees, restructuring fees, and a percentage of the recovery amount, typically between 2% to 4%.

Pegasus Asset Reconstruction Private Limited

Pegasus ARC is engaged in obtaining and retrieving Non-Performing Assets (NPAs) in different industries.

Establishment Date

Pegasus Asset Reconstruction Private Limited was established in the year 2008 and headquartered in Mumbai.

Interest/Fees

Pegasus ARC commonly applies interest rates between 10% and 18% per year, along with extra charges like restructuring fees and success-based fees, which usually amount to 3% to 5% of the recovered sum.

Invent ARC Private Limited

Invent ARC, a pioneer in the ARC sector, focuses on acquiring and overseeing NPAs.

Establishment Date

Invent ARC Private Limited was established in the year 2003 and headquartered in Mumbai.

Interest/Fees

ARC’s interest rates usually fall within the range of 11% to 17% annually. Fees are also charged for managing assets and achieving successful recovery, typically ranging from 2% to 5%.

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Reliance Asset Reconstruction Company Limited

This ARC, which is a part of the Reliance Group, focuses on acquiring and recovering distressed assets.

Establishment Date

Reliance Asset Reconstruction Company Limited was established in the year 2008 and headquartered in Mumbai.

Interest/Fees

Typically, annual interest rates fall between 12% and 19%. Reliance ARC might also impose initial fees and performance fees, typically determined according to the details of the asset and the plan for recovering it.

India SME Asset Reconstruction Company Limited

This ARC generally concentrates on the recovery of non-performing assets in the SME sector, promoting the revival and rehabilitation of distressed small and medium enterprises.

Establishment Date

India SME Asset Reconstruction Company Limited was established in the year 2008 and headquartered in Mumbai

Interest/Fees

ISARC commonly applies interest rates ranging from 10% to 15% annually, with a specific emphasis on assets in the SME sector. Service fees and a percentage of recovery, usually ranging from 2% to 4%, might also be added.

UV ARC

This type of ARC is known for its focus on the resolution of distressed assets across various sectors, including real estate and infrastructure.

Establishment Date

UV ARC was established in the year 2007 and headquartered in Mumbai.

Interest/Fees

UV ARC typically applies annual interest rates that fall between 12% and 18%. A restructuring fee and a success fee are also charged, typically between 2% and 5% of the recovery amount.

International Asset Reconstruction Company Private Limited

IARC specializes in handling troubled assets in the retail and SME industries, encompassing acquisition, management, and resolution.

Establishment Date

IRAC was established in the year 2002 and headquartered in Mumbai.

Interest/Fees

Typically, IARC’s annual interest rates fall between 12% and 18%. They additionally charge fees for restructuring services and a portion of the proceeds recovered, typically ranging from 3% to 5%.

Alchemist ARC Limited

Alchemist ARC Limited focuses on solving distressed assets by using creative recovery techniques and financial restructuring.

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Establishment Date

Alchemist ARC Limited was established in the year 2002 and is headquartered in Mumbai.

Interest/Fees

Usually sets interest rates ranging from 10% to 16% annually. Alchemist ARC might also consist of a mix of initial fees, operational fees, and performance-based fees, typically falling within the range of 2% to 4%.

Conclusion

ARCs play a vital role in India’s financial system by tackling NPAs and supporting economic stability. ARCIL, Edelweiss ARC, JM Financial ARC, Phoenix ARC, and Aditya Birla ARC are top ARCs that assist banks in handling troubled assets within RBI’s strict regulations. By rejuvenating these resources, ARCs not only aid banks but also stimulate wider economic development. Although faced with difficulties in assessing asset values and directing legal procedures, ARCs are actively finding new ways to improve recovery outcomes.

FAQs

  1. Which one is the largest asset reconstruction company in India?

    For the last two decades, ARCIL can be considered one of the largest asset reconstruction companies in India with an aggregate total of Rs.1.5 Lakh Crore with the dues of the Indian banking system of which 45 to 50% is already resolved and existed.

  2. How many ARC companies are there in India?

    There are in total 28 asset reconstruction companies in India that have been registered under the Reserve Bank of India.

  3. How does the asset reconstruction company earn?

    ARCs usually earn through acquiring financial assets and also issuing security receipts.

  4. Which body regulates ARCs in India?

    The ARCs in India are regulated by the SARFAESI Act of 2002 and registered under the Reserve Bank of India.

  5. What is the difference between bad banks and ARCs?

    A bad bank can be ARC or any asset management company that usually takes over the bad loans of commercial banks and also manages them and finally recovers the money for a period of time.

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